Hong Kong’s property denies disappointing forecast


Forecasts for Hong Kong’s property market last year were so bleak that Peak’s outlook ignores the region on its more polluted day.

Billions upon billions of assets were expected to be valued due to political uncertainty, travel bans related to the Kovid-1p epidemic, and the UK’s decision to open the door to Hong Kongers holding British national foreign passports.

The region’s property market, however, is not the first time Doba-Bojha has denied the forecast.

At the time the rent went down, according to Land Registry data, Hong Kong’s April property deals at more than double the price. In the secondary market, home prices are on the verge of reaching a 23-year high, according to estimates by property firm Senteline. The average home price is just 2 percent embarrassing from the historical highs.

“Hong Kong is a unique market. There is constant demand from the type of buyer for whom the price is not reasonable. Supply is always limited. None of that has changed, ”said Derek Chan, head of research at real estate firm Riccarp Properties.

It was expected that the property would be affected by the UK’s decision to allow residents within 3 meters of the area who are entitled to or eligible for it to choose a path conducive to their citizenship. BNO passport.

In fact, about 310,000 BNO passports were issued last year, more than double the previous year. A survey by the British Home Office found that around 153,300 Hong Kong people were forecast to settle in the UK. Some of these BNO passport holders must have been active buyers in the UK.

London would be relatively attractive to the Hong Kong Kangaroos. The area was the most expensive property market in the world last year, with an average home price of 1.2m or 1, 1,987 per square foot, more than double that of London. Moreover, its main residential property provides one of the lowest rental payments in the world, at 1.6 percent. That compares with an average yield of 3.6 per cent in London at the end of last year.

Yet neither of these two factors is very important for wealthy mainland Chinese investors looking for a place to park the cash near their homes. Home prices in Hong Kong have risen more than 200 percent over the past decade. Mainland buyers are returning to the region to look at past returns. Locals have filled in any gaps.

Hong Kong residential property purchases by mainland Chinese buyers rose 40 percent in the first two months of this year. Beijing’s recent demand for a resource management link between the mainland and Hong Kong should be even greater. Some mainlanders probably saw it as a stamp of Beijing’s approval of investing in Hong Kong.

“At current rates, housing prices should increase by up to 15 percent this year,” Chan said. He said that although the border between Hong Kong and mainland China was largely closed due to the epidemic, there was significant demand from mainland Chinese buyers. “When the border is reopened, there should be a dramatic increase.”

Hong Kong developers have quickly capitalized on it. Road King Infrastructure and Sun Hong Kai raised the price of its latest apartment batch by 11 percent as it sold new developments.

Yet in the stock markets, Hong Kong’s developers have moved away from most of last year, significantly underestimating them. They trade with significant discounts for the value of free assets, more than 50 percent, are considered politically risky, and tourism in urban states falls steadily.

However, on closer inspection, profits from raising rents and property prices in their property portfolio in mainland China have offset weak retail rents and vacant hotels in Hong Kong. It exposes investors to profits from central commercial property in key cities such as Shenzhen and Shanghai, subtracting the heavy debt burden of mainland developers.

Developers in Hong Kong are flushing with cash and there are some strong balance sheets across peers around the world. For example, CK Asset’s net gearing – total debt versus total shareholder equity – stood at only 4.6 percent, lower than the pre-epidemic level. Which compares to 98 percent with 153 percent of the mainland Pierre Kaisa and Evergrand.

The failure of dark forecasts over the past year has undermined opportunities for investors. They should take note of Hong Kong developers.

june.yoon@ft.com



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